Pension Management Charges

What's a pension fund?

This might be one of the most straightforward questions yet slightly complex to answer than you might think.

Almost 60% of retirees don’t plan for their pension schemes. To get the best pension plan, you need to plan ahead and ensure that you get the proper guidance. According to most financial experts, controlling and planning for the pension costs is now more vital than ever. It’s because the pension fees you pay will compound for several years before you retire. Therefore, even the smallest reduction into your pension1 scheme costs could make a significant difference to the size of your pension pot.

That said here’s a complete rundown of some of the most common pension management charges.

How to Figure Out Pension Management Charges

Pension fund management fees are widespread, and they cover the admin costs of managing your pensions. Most of the management fees include investment charges which are typically the costs associated with researching and choosing the numerous assets your pension savings are invested in.

You need to pay management charges once a year and pension providers charge them as either a flat fee or as a ratio of the value of your pension pot. The FCA2 regulates pension schemes and pension companies are permitted on charging various amount, and the more specialised your pension investment reserves are, the higher your pension fund will be.

Charges on pension plans are lower than on other investment schemes like ISAs. However, it’s crucial to consider the long-term effect that pension management charges can have on your pension savings before you choose a particular pension scheme. Low-fee pension schemes or those that decrease as your savings go up will allow you to keep more of your pension funds for retirement.

With time, large management fees3 can drastically lower your savings amount, and you can figure out the amount you’re being charged by checking your pension plan or by speaking to your pension scheme administrator.

Other Pension Charges

Pension management fees UK are always stated upfront by pension providers. Nonetheless, additional and sometimes hidden charges might apply. Two of the most popular pension fees are the entry and exit fees which you have to pay so that you can quickly close down a pension plan or open a new one. These charges can sometimes be referred to as pension transfer charges since they’re charged when you shut down an old pension and transfer your savings into a new pension scheme.

Other pension charges might include an underlying fund fee, which caters for the management of each pension fund in your portfolio. There are also the platform fees that use an online platform to manage your investments and the inactivity fees what pension companies charge you if you stop making contributions to your pension plan.

Money is essential, and whether you plan on sailing around the world or just enjoying some peace of mind in your backyard, getting the right pension plan with affordable charges will help you make your retirement memorable.

The good news is that the cost of pension management charges has been decreasing over the last couple of years, and you can now find several incredible pension options on the market. So be sure to choose wisely!

Common Questions

How Can You Fund A Low-Cost Personal Pension?
What Charges Apply to Your Personal Pension Plan?
How Do Pension Management Charges Work?
Are Pension Management Fees Tax Deductible?

Our top pension articles

Pension Tax Relief

In 2017-2018, the projected gross pension1 tax relief was €38billion, up from €37 billion in

Our popular guides

Money Management

Learn about why hiring a professional accountant may often be the best solution.

Mortgages

Find a mortgage plan that’s personal and designed to suit your individual needs.

Life Insurance

Explore your options for short-term funds to help you secure that new home.

Pensions & Retirement

Discover the types of pensions available and the steps to take before retiring.

Inheritance Planning

Find out what you should do to make the most of your money.

Bridging Loans

Explore your life insurance and income protection options.

Contact us about your goals or if you need to chat to a financial adviser.

We focus on creating financial security and building long-term wealth for our clients.